A Web 2.0 entrepreneurial bubble?
Following my post Online V’s Offline Entrepreneurs I have received a few messages about the possibility of a Web 2.0 bubble having formed. After digging around I’ve found quite a bit of commentary on the current state of play.In a nutshell, Web 2.0 is made up of a group of technologies that make interactive applications and businesses possible via web delivery. For example, my restaurant company uses a Web 2.0 solution to deploy the financial, operational and personnel functions of the business online. My argument was that Web 2.0 has reduced the barriers to business for budding entrepreneurs, and therefore web businesses could provide a truer test of the entrepreneurial skill set than traditional business.
Now the theory being kicked about is that when barriers to entry become too low, and skills are abundant (web technology is maturing so there are plenty of experienced developers around), every man, woman and her dog sets up in business. Replication of ideas is huge, and there is an eventual crash.
Feeling is growing that a real entrepreneur bubble has developed. Blog posts such as The Web 2.0 Entrepreneur Bubble are rife. It is certainly true that the “become a website entrepreneur and earn $xxx,xxx” stories are growing, and so to are comparisons with the Internet investment bubble of the late nineties.
I kind-of agree with this scenario, but things are very different this time around. Web 2.0 can deliver real solutions to real businesses. In the 1999-2002 internet bubble many web based businesses were fighting over a non-existent customer bases. The web is now a maturing business medium and customer bases are proven.
But to be honest none of this talk bothers me. At some point, whether it be by bubble burst or natural shakeout, Web 2.0 businesses will fail because they have been set up without a true understanding of their markets by people that lack the skills to succeed. This is exactly the test I was referring to. The businesses that remain will be spearheaded by entrepreneurs that have started their business with less capital, from a huge diversity of backgrounds, and that represent a truer picture of modern entrepreneurialism than in bricks and mortar businesses.
Geese it's getting heavy around here.
If you want to read further into this, I would rather bizarrely recommend you read my name sakes blog (no relationship as far as I know): Paul Fisher, The coffee shops of Mayfair who goes into some detail on Web 2.0.
posted by Paul Fisher @ 5:08 pm
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